Advanced BioHealing Exec charged with paying kickbacks to VA docs

Federal prosecutors are saying that Advanced BioHealing Inc. executive Todd Clawson and others paid kickbacks to VA podiatrists and clinicians who promoted the company’s product, a “biologic” wound dressing. Clawson has been charged with bribery and health care fraud.

In court papers, the prosecutors stated that Clawson and his coworkers at Advanced BioHealing and VA physicians conspired to “defraud the United States by impeding and impairing the governmental functions of the VA, including those intended to regulate the ethical practice of physicians working for the VA.”

Advanced BioHealing, a Westport, Connecticut company, produces a “living skin equivalent” dressing to treat diabetes-related foot sores. The company was granted a large federal contract for the product – Dermagraft – in late 2008 shortly after Clawson went to work there. According to the court papers, Clawson served as director of the Advanced BioHealing division selling to the federal government. As such, he managed a team of 35 salespersons and was primarily concerned with selling the bioengineered bandages to the VA.

In 2011, the Irish pharma company Shire Plc brough Advanced BioHealing for $750 million. It then sold the company in 2014 after recording a $650 million loss. Clawson and others are said to have paid to fly a Phoenix VA doctor to Cabo San Lucas, Mexico, for a days-long fishing trip in August 2010. According to charging papers, Clawson also plied a VA doctor with Def Leppard tickets in 2011.

Prosecutors say doctors were taken fishing in Jackson Hole, Wyoming, dined in Los Vegas and flown around the country to promote Dermagraft. .

The speaking engagements were held off VA property outside of work hours, Jennings continued, but Advanced BioHealing “lured VA physicians and clinicians to attend by supplying all invited guests with free meals at expensive restaurants.”

Advanced BioHealing paid VA doctors $1,500 a day to allow sales reps to accompany them as they treated veterans at VA facilities, according to charging papers. Doctors were paid $3,000 to provide “sales training” to Advanced BioHealing staff, the prosecutors continued, and $2,000 to serve on an “advisory board.”

Clawson and his colleagues are alleged to have paid doctors in Washington, California, Arizona, Ohio, Texas and Georgia.

Clawson was charged with conspiracy to commit criminal conflicts of interest, bribery and health care fraud. He has also been charged with one count of health care fraud.